In February 2003, before the top officials of the Ministry of Science, Iranian President Mohammad Khatanmi reportedly announced a program for a complete nuclear fuel cycle, which was to consist of the following components:
Mining Uranium in Saghand (200 kilometers, 125 miles from Yazd) from 350 meters (1160 feet) deep.
Preparing Yellow Cake in Ardekan near Yazd (at a site known as the Ardekan Nuclear Fuel Unit).
A Uranium Conversion Facility (UCF) at the Esfahan site. At the UCF at Esfahan, using the yellow cake prepared in the Ardekan, a number of by-products including uranium hexofloride (UF6), metallic uranium, and uranium oxide (UO2) were produced. These were later used for uranium enrichment.
Natanz Uranium Enrichment Facility. Using the yellow cake and the products of the Isfahan UCF unit, uranium was enriched using the centrifuge equipment, and nuclear fuel pellets were to be eventually produced in Natanz. These pellets could then be used to form the fuel rods.
Some US officials suspected Iran of operating secret enrichment and other undeclared nuclear related facilities elsewhere in the country other than those declared in 2003.
In a 6 June 2003 report, titled Implementation of the NPT safeguards agreement in the Islamic Republic of Iran: Report by the Director General by the International Atomic Energy Agency (IAEA), the Director General identified a number of corrective actions by Iran that were necessary to enable the Agency to verify the previously unreported nuclear material declared to have been imported by Iran in 1991. These actions included the provision of design information on the waste storage facility at Esfahan, and the granting of access to that facility, as well as to Anarak and Qom, where waste resulting from the processing of the imported material was said to have been stored or had been disposed of.
There remained significant open questions related to Iran's enrichment program. The 26 August 2003 IAEA report provided information making clear Iran had consistently misled the Agency about its enrichment program. First, as paragraph 30 revealed, Iran's centrifuge enrichment program did not begin in 1997, as Iran initially told the IAEA, but in 1985, almost 20 year prior. Second, Iran's centrifuge program was not entirely indigenous, as Iran initially told the IAEA and as Atomic Eenergy Organization of Iran (AEOI) President Agazadeh assured an informal meeting of the IAEA Board on 6 May 2003. Iran later said it received centrifuge drawings in 1987 from a still unnamed foreign intermediary and, in addition, Iran said it imported components for centrifuges and a cascade design. Third, the Kalaye Electric Company, which Iran originally told the IAEA only produced centrifuge components, was subsequently said to have been a central part of its centrifuge testing program for five years (between 1997 and 2002). Iran continued to claim, implausibly, that it had never introduced nuclear material into centrifuges.
The IAEA discussed with Iranian officials during the meetings that took place on 9-12 August 2003. In that discussion, in contrast to earlier information provided about the launch dates of the program and its indigenous nature, AEOI officials stated that the decision to launch a centrifuge enrichment programme had actually been taken in 1985, and that Iran had received drawings of the centrifuge through a foreign intermediary around 1987. The officials described the program as having consisted of three phases: activities during the first phase, from 1985 until 1997, had been located mainly at the AEOI premises in Tehran. During the second phase, between 1997 and 2002, the activities had been concentrated at the Kalaye Electric Company in Tehran. During the third phase, 2002 to the time of the discussions, the research and development and assembly activities were moved to Natanz.
The Iranian authorities also explained that during the first phase, components had been obtained from abroad through foreign intermediaries or directly by Iranian entities, but that no help had been received from abroad to assemble centrifuges or provide training. Efforts were concentrated on achieving an operating centrifuge, but many difficulties had been encountered as a result of machine crashes attributed to poor quality components. According to the AEOI officials, no experiments with inert or UF6 gas were conducted. Iran indicated its willingness to make available for interview key scientists responsible for that phase of the enrichment programme. According to Iranian officials, from 1997 through 2002, the activities were concentrated at Kalaye Electric Company, and involved the assembly and testing of centrifuges, but again without inert or UF6 gas.
There were also open questions in June 2003 about laser enrichment. The 26 August 2003 report suggested that those questions were still open. Iran had not allowed IAEA inspectors to take environmental samples at a key laser research site, whose existence it had previously not acknowledged, and did not let them visit the site until after some equipment, including a large imported vacuum vessel that could have applications for laser uranium enrichment, had been moved to another location.
There were also "open questions" in June 2003 about the Kalaye Electric Company site. After months of repeated requests, the IAEA was finally allowed to take environmental samples there in August 2003, but the 26 August 2003 report noted that Iran had used the intervening months to make "considerable
modifications" to the site that "may impact on the accuracy of the environmental sampling and the Agency's ability to verify Iran's declarations about the types of activities previously carried out here."
In an IAEA report to the Board of Governors on 15 November 2004, the IAEA concluded that Iran's apparently compliance with the NPT Safeguards Agreement up to October 2003 had been marked by heavy concealment and failures to declare and disclose various nuclear activities. Iran had, as a corrective measure, submitted a series of inventory change reports (ICR) to the IAEA in October 2003, with the stated aim of implementing a policy of cooperation and full transparency. Iran also signed the Additional Protocol to the Agreement in 2003, but as of the 2004 had yet to ratify it.
The IAEA also said that in 2004 there remained two important issues relevant to the IAEA's investigation in order to provide assurance that there were no undeclared enrichment activities in Iran: the origin of LEU and HEU particle contamination found at various locations in Iran and the extent of Iran's efforts to import, manufacture and use centrifuges of both the P-1 and P-2 designs.
By November 2005 the IAEA repeated that Iran was suspected of not being entirely transparent and open about its nuclear activities, continuing to delay or deny access to locations and individuals, and impose severe limitations on enviornmental sampling and other information gathering by IAEA inspectors. These restrictions continued into 2006. The IAEA for example reported in August 2006 that Iran has been providing the Agency with access to nuclear material and facilities, and had provided the required reports. Although Iran had provided the Agency with some information concerning product assays at Pilot Fuel Enrichment Plant (PFEP, at Natanz), Iran continued to decline Agency access to certain operating records at PFEP.
By 2007 the IAEA reported that most of its access problems had been resolved and that they were able to verify the non-diversion of declared nuclear material in Iran. The IAEA remained unable, however, to make further progress in its efforts to verify fully the past development of Iran's nuclear programme and certain aspects relevant to its scope and nature. Hence, the IAEA was unable to verify the absence of undeclared nuclear material and activities in Iran unless Iran were to address the long outstanding verification issues through the implementation of the Additional Protocol (which it signed on 18 December 2003, but had not yet brought into force) and the required transparency measures. Iran continued to operate various enrichment and other nuclear facilities through July 2008, despite UN resolutions calling for their immediate suspension dating back to 2006.